China Telecom Bundles Free Internet 3G Subscription Plans

The South China Morning Post is reporting that China Telecom Corp Ltd, through its Beijing subsidiary (Beijing Telecom), will offer free mobile Internet usage to mobile subscribers who sign up before Jul. 30th. China Telecom will also reduce local call fees (now between RMB 0.11 and RMB 0.19), down 72% for subscribers to new monthly packages – between RMB 49 and RMB 189.

China Telecom’s “free” mobile Internet and reduced call rates are clearly designed to boost 3G services consumption and gain more market share. China Telecom’s 3G network has a coverage rate of more than 98% in urban areas in Beijing.

According to a source quoted in the SCMP, China Telecom’s CDMA2000 3G network rollout will proceed rapidly in Beijing and Guangdong. China Telecom is aiming to introduce its upgraded 3G service in Beijing and Guangdong as early as this month.

Now the 64 million yuan question … Will Apple develop a CDMA2000 3G (EV-DO) iPhone for China Telecom and go after the relatively affluent urban Netizens that China Telecom is targeting through their new bundled data/call plans in Beijing and new eSurfing plans in Shanghai?

Update – March 23, 2009: Based on recent progress in Apple and China Unicom negotiations, it appears more likely that Apple will grant a 3G exclusive to China Unicom. Much more > HERE

China Telecom has also now engaged with Microsoft on a search deal and is rumored to be in discussions with Research in Motion on a Blackberry deal, although both China Telecom and RIM have denied that a deal has been concluded.

iPhonAsia comment: Will China Telecom play Cinderella and be invited to the iPhone Ball? The two step sisters – China Mobile and China Unicom have been getting all of the attention in the “iPhone in China” drama. After all, these two carriers have the right wireless pedigree and they have subscribers… lots of subscribers! China Mobile has 458 million and China Unicom has 135 million. And poor Cinderella, China Telecom, has a mere 28 million wireless subscribers (primarily in Southern provinces). So what could China Telecom offer the princely Apple? How about 40 million relatively affluent broadband subscribers, 210 million landline subscribers, and a brand new WiFi for mobile service – eSurfing! The new eSurfing service plan is available to PCs, Macs and mobile phones. China Telecom has also kicked off an array of eSurfing promotions under which subscribers to the wireless broadband monthly plans and the voice service (under eSurfing) are entitled to 300-minutes of talk time each month at no charge. Combining CDMA2000 3G and WiFi is part of China Telecom’s core strategy.

Should Apple choose to slip the glass slipper on China Telecom’s dainty foot, strong WiFi capability may be one of the key decision points. By the end of 2009 China Telecom will establish 25,000 eSurfing Wi-Fi hot spots nationwide and about 3,000 of these spots are going to be in Shanghai, an iPhone hotbed.

But no romance is without its challenges. If the relationship is to be, Apple will have some technical issues to resolve, including 3G compatibility and meeting China’s WAPI WiFi standards (China’s WAPI = Wide Authentication and Privacy Infrastructure, or GB15629.11-2003 national standard differs from international WiFi standards).

China Telecom CEO Wang Xiaochu

China Telecom is the proud owner of a new CDMA2000 3G license. The current model iPhone supports W-CDMA 3G (a world standard 3G network currently being built out by China Unicom) but does not support China Mobile’s “indigenously innovated” TD-SCDMA 3G nor China Telecom’s CDMA2000 3G.

Would Apple consider building a CDMA2000 (EV-DO) ready iPhone? The crystal ball says; “prospects look favorable.” Apple has been scouting out EV-DO and CDMA Engineers for months in their online iPhone job postings. And oh, by the way … a CDMA2000 (EV-DO) ready iPhone model for China Telecom would likely run on Verizon’s network in the U.S. Hmmm? Another post for another day.

Take heart China Mobile and China Unicom … The dance floor is spacious and it wouldn’t be a Ball with only one princess on the dance card … In fact, rumor has it that China Unicom is now (or very soon will be) in Cupertinotrying on the glass slipper.